CONTRACTS - Fall 2012 Flashcards
(42 cards)
“Accord & Satisfaction” in CA
CA Civ Code s. 1526 provides that a payment in full check does not operate as an accord and satisfaction if the creditor strikes out the restrictive words or can prove that she cashed the check w/ out knowledge of the restriction.
“Accord & Satisfaction” in CA (part 2)
CA Civ Code s. 1526 (b)(2) the debtor must give notice in writing ti the creditor “not less than 15 days nor more than 90 days prior to receipt of the check or draft…”
Mutual Assent (Civ Code)
Consent is not mutual, unless the parties all agree upon the same thing in the same sense.
The consent of the parties to a contract must be:
1. Free;
- Mutual; and,
- Communicated by each to the other. (Cal.Civ.Code § 1565)
Contract
A contract is an agreement to do or not to do a certain thing. (Cal.Civil Code § 1549)
Mutual Assent (includes what 2 things)
Mutual assent is ordinarily established by a process of offer and acceptance.
objective theory
the mental assent and intent of the parties is irrelevant. The objective theory has been dominant
Contract forms
A contract may be oral, written, or partly oral and partly written. Unless some law provides otherwise, an oral, or a partly oral and partly written contract, is as valid and enforceable as a written contract. (Cal.Civil Code § 1622)
Express contract
In an express contract, the existence and terms of the contract are stated in words or the writings of the parties.
Implied contract
In an implied contract, the existence and terms of the contract are inferred from the conduct of the parties. (Cal.Civil Code § 1619, 1620, 1621)
Consideration
Any act or forbearance which is of benefit to the promisor or detriment to the promisee. (Rest.2d §71; Cal.Civ.Code §1605.)
Context for Consideration
consideration must arise in the context of a bargained for exchange. This means that the promise must induce the detriment and the detriment must induce the promise.
Past Consideration / Moral Obligation
A moral obligation is a sufficient consideration to support a subsequent promise to pay where the promisor has received a material benefit, although there was no original duty or liability resting on the promisor. (Webb v. McGowin, 27 Ala.App. 82, 168 So. 196 (1935); Cal.Civ.Code §1606.)
Promissory Estoppel - Common Law
Reasonably expected reliance may under some circumstances make binding a promise for which nothing has been given or promised in exchange. (Earhart v. William Low Co. (1979) 25 Cal.3d 503, 600 P.2d 1344.)
Promissory Estoppel - Rest. 2d.
Where legal consideration is lacking courts sometimes enforce gratuitous promises under the theory of “Promissory Estoppel” (Rest.2d §90)
Three elements must exist in order to invoke promissory estoppel:
Foreseeability, Reliance, & Injustice
Illusory Promises
A promise which is conditioned upon the whim of the promisor is not consideration. (See, Rest.2d § 77(1).) Such a promise is called an illusory promise.
Rest 2d 87 - use of Prom. Est.
Does not impose the requirement that the promise giving rise to the cause of action must be so comprehensive so as to meet the requirements of an offer.
Modification to Agreement
A modification of a contract is a change in an obligation by a modifying agreement. With the exception of contracts for the sale of goods, (see UCC 2-209) to be effective the modifying agreement must be supported by additional consideration.
Unilateral Contract
A unilateral contract is one in which the offeror is bargaining for a completed performance.
Bilateral Contract
A bilateral contract is one inwhich the offeror is bargaining for a promise to perform. Most contracts which have commercial significance are bilateral.
CA Statute of Frauds
California’s Statute of Frauds, found at Cal.Civ.Code §1624, provides that certain contracts “are invalid, unless the same, or some note or memorandum thereof, is in writing and subscribed by the party to be charged.”
Purpose of Statute of Frauds
Prevent perjured testimony in proof of purported contracts of important types and the statute applies only to those enumerated types.
The Parol Evidence Rule
Applies to any type of contract, and its purpose is to make sure that the parties’ final understanding, deliberately expressed in writing shall not be changed.
SOF - Performance not to be performed one year
“The question is not what that probable, or expected, or actual performance of the contract was, but whether the contract, according to the reasonable interpretation of its terms, required that it should not be performed within the year. “ (Warner v. Texas & Pacific R. Co., 164 U.S. 418, 17 S.Ct. 147, 41 L.Ed. 495 (1896)
